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Nakamura Case

Mr. Nakamura, owner of a lacquer company in Japan, receives two offers to expand his business internationally. The first is from a Chinese company to supply products under their brand for 3 years. The second is a 5-year deal from an American company to globally promote Mr. Nakamura's own brand with a $1.5 million marketing budget. Analyzing the options, Mr. Nakamura is recommended to choose the second offer to build his brand globally with no costs and long-term investment. He should also ensure production capacity for the expected demand over 5 years.

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222 views3 pages

Nakamura Case

Mr. Nakamura, owner of a lacquer company in Japan, receives two offers to expand his business internationally. The first is from a Chinese company to supply products under their brand for 3 years. The second is a 5-year deal from an American company to globally promote Mr. Nakamura's own brand with a $1.5 million marketing budget. Analyzing the options, Mr. Nakamura is recommended to choose the second offer to build his brand globally with no costs and long-term investment. He should also ensure production capacity for the expected demand over 5 years.

Uploaded by

khem_singh
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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ACA

Nakamura Lacquer Company Case

Submitted to: Submitted by:

Prof. Y N Kaushal Ankita Sehjpal


FMG 19B 191076
Summary
The Nakamura lacquer company of Kyoto, Japan making lacquer for the daily table use with
Chrysanthemum brand became bestselling brand in japan. But practically Company has no
business outside of the Japan and to be a global brand, so it’s require to expanding Nakamura
Lacquer Company business outside Japan. U.S. could be big market for Nakamura
“Chrysanthemum” product. In this situation Mr Nakamura received offer in rapid sequence from
two visitor of the U.S.

Situation analysis
Mr Nakamura had taken over his old family business in that height where his lacquer demand
reached 5 lakh sets in domestic market. His brand Chrysanthemum has become Japan’s best
known and bestselling brand with good quality, middle class, and dependable. Now he wants to
expand his business in abroad .But as the rule, Japanese government does not allow anyone to
invest in abroad. Outside of Japan however, Mr Nakamura did no business, except for selling
occasionally to American tourists through his established Japanese outlets such as the big
departmental stores & therefore Mr Nakamura needed to expand his market. Mr Nakamura
received two good offers from United State companies, which are building a dilemma in front of
him to accept which offer.

PROBLEM STATEMENT:

Mr Nakamura has to make a decision whether he should go with first offer or second offer. Also
he has to decide whether to explore new territories in the global market, taking into consideration
the present opportunities and risks.

STATEMENT OF OPTIONS:

Mr Nakamura has three options;

(1) He should sign a deal with National China Company


(2) He should sign a deal with Semmelback, Semmelback and Whittacker
(3) He should continue his business and expand in that market without sign a deal.

EVALUATION OF OPTION:

If he makes a deal with National China Company:

 There is no global representation of his brand.


 He has to supply with Rose and Crown trademark and he can’t sell with his own brand
Chrysanthemum. So after the end of 3 year Mr Nakamura's company might have to
restart all business again.
 The cost has to be endured by Mr Nakamura himself.
 The profit margin will increase by 5%.

If he makes a deal with Semmelback, Semmelback and Whittacker:

 There is a global promotion and representation of his brand “Chrysanthemum” in U.S.


market, which will enhance the market of Chrysanthemum.
 There is no risk.
 Time duration of contract is 5 years, which is a long term investment for Nakamura
Lacquer Company.
 The company is willing to pay the full cost of introduction for the next two years for
introduction and promotion with budget $ 1,500,000.

If he is conservative and doesn’t want to lose anything then he should go with 3rd option. Where
he will concentrate in his domestic market and try to improve that market and profit. But in this
case product will not get the brand image in the global market and profit margin will be limited.

RECOMMENDATION:

After evaluation of option it is recommended that Mr Nakamura should sign deal with
“Semmelback, Semmelback and Whittacker, Chicago “, because this is a long term profit deal.
He is able to promote his own brand in international market and there is no introductory cost by
Mr Nakamura.

ALTERNATIVE PLAN:

He has to see whether he is able to produce the required demand or not because it is expected
that demand will be around 2 million per year within five year and if he is not able to produce
then he will lose the opportunity cost. If anyhow he is not able to make this deal profitable then
he should not leave his original customers of Japan. He should focus on his domestic market and
try to overcome that loss which he bears in that deal.

No. of words - 647

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